The Alchemists

Three Central Bankers and a World on Fire

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Overview

When the first fissures became visible to the naked eye in August 2007, suddenly the most powerful men in the world were three men who were never elected to public office. They were the leaders of the world’s three most important central banks: Ben Bernanke of the U.S. Federal Reserve, Mervyn King of the Bank of England, and Jean-Claude Trichet of the European Central Bank. Over the next five years, they and their fellow central bankers deployed trillions of dollars, pounds and euros to contain the waves of panic that threatened to bring down the global financial system, moving on a scale and with a speed that had no precedent.

Neil Irwin’s The Alchemists is a gripping account of the most intense exercise in economic crisis management we’ve ever seen, a poker game in which the stakes have run into the trillions of dollars. The book begins in, of all places, Stockholm, Sweden, in the seventeenth century, where central banking had its rocky birth, and then progresses through a brisk but dazzling tutorial on how the central banker came to exert such vast influence over our world, from its troubled beginnings to the Age of Greenspan, bringing the reader into the present with a marvelous handle on how these figures and institutions became what they are – the possessors of extraordinary power over our collective fate. What they chose to do with those powers is the heart of the story Irwin tells.

Irwin covered the Fed and other central banks from the earliest days of the crisis for the Washington Post, enjoying privileged access to leading central bankers and people close to them. His account, based on reporting that took place in 27 cities in 11 countries, is the holistic, truly global story of the central bankers’ role in the world economy we have been missing. It is a landmark reckoning with central bankers and their power, with the great financial crisis of our time, and with the history of the relationship between capitalism and the state. Definitive, revelatory, and riveting, The Alchemists shows us where money comes from—and where it may well be going.

Praise

The New York Times:“[Mr. Irwin] has provided an accessible, engrossing account of the tribulations that Mr. Bernanke, with Mervyn A. King of the Bank of England and Jean-Claude Trichet of the European Central Bank, endured in pulling the world financial system back from collapse… Mr. Irwin seems to have talked with everyone, read the right scholarly papers and interviewed important dissenters in the Fed, the European Central Bank, the Bank of England and the Bundesbank… He has a nice touch for translating central banking’s mysteries, opaque and forbidding, into understandable English. He is astute in describing the internal and external politics of institutions traditionally expected to remain above politics of the usual sort.”

Adam S. Posen, Foreign Affairs, President of the Peterson Institute for International Economics and member of the Bank of England’s Monetary Policy Committee from 2009 to 2012:“An excellent account…scrupulously reported and full of clear explanations of events and economic concepts….an incredibly valuable book for all economically concerned non-economists. As someone who knows well the three central bankers that the book features…I can attest that the narrative has more than just a ring of truth. It gets the individuals, the circumstances surrounding their decisions, and their motivations right and also presents them fairly. Irwin’s volume will have lasting value for a wide range of audiences, including students and elected officials, but it will make its greatest contribution as a corrective to the many unfounded or simply crazy ideas about monetary policymakers’ intentions and impact.”

The Wall Street Journal:“A detailed and fast-moving account of these perilous years. This is the crisis as told through emails, phone calls, meetings and one very fateful walk along the beach in Deauville, France.”

Kirkus Reviews:“The most complete and authoritative account to date of the response of the central bankers to the global financial crisis.”